The Rising Tide

1. Recently, Trump has labeled himself a “wartime” president with his approval ratings on the rise.
2. As this wartime effect wears off, his approval rating will slip further and further due to a worsening economy and a growing number of us being ripped away by the virus.
3. Trump will lose the reelection as the economy worsens and as long as the Democratic Party stays unified under one candidate.

The question is, is President Trump closer to a “wartime” president or closer to a president on the verge of economic collapse? The next month will likely predict which is ultimately true and will decide who wins the 2020 presidential election.

It was on March 18, 2020 when President Trump declared himself a “wartime” president. Why does this concept matter for the economy and for the upcoming election? One can see this through the lens of history. In the past, the American people were willing to overlook a great deal of rather controversial actions made by the president in those times. For George W. Bush this was the U.S. Patriot Act flowing the terrorist attacks on September 11, 2001. For Franklin D. Roosevelt, it was putting innocent Japanese Americans into internment camps after Pearl Harbor. For Abraham Lincoln it was the Habeas Corpus Suspension Act, allowing the imprisonment of political rivals, some members of the press, and others seen as a “problem” by the president of the United States. The presidents of those times were able to do such acts since they became the face of America in the face of a common “enemy”.

What does this mean for President Trump? He will effectively be forgiven for many past and current controversial steps and missteps. This will include, for some, impeachment, false statements about the travel ban, his previous comments on the virus, and the firing of Michael Atkins, who initiated of allegations surrounding Trump with Ukraine. In other words, a lot of actions become tolerable or even welcomed in times of great national pain and stress.

The next question then becomes, how long can his better approval ratings last? Will it last days, months, years? This time period is already over or at the very least showing the signs of it slipping away. In the figure below from Real Clear Politics, his approval rating spiked after several relief packages went out in an attempt to pull the economy back from the brink. This period is marked by 1.

Next came the transition period, marked by 2, which saw the progress made by the president in this time thaw out till phase 3 started to take place. This third phase is marked by March 31, 2020, the day the White House finally admitted the true scale of the disaster that is currently unfolding. The announcement stated 100,000 to 240,000 Americans will be ripped away from us by COVID-19. This is under the best circumstances with the potential loss of life being 1.5 to 2.2 million of us Americans.

Even if one were to assume the federal government has done everything correctly in the midst of the COVID-19 outbreak we can now look at the U.S. economy. This is the tsunami that will likely whip away our “wartime president” mindset.

This fading away can be seen in both the drop in the stock market and in the staggering climb in unemployment. The chart above is the Dow Jones being the worst quarter since 1987 and the worst quarter for the S&P 500 since 2008 or in other words, since The Great Recession. The Dow fell 23% and S&P 500, 20%, erasing any gains President Trump has made since taking office. Worse still, it is estimated unemployment rate has risen to 13% according to the New York Times. If this estimate holds true then it will be the highest since the Great Depression and we are just getting started.

One may say this will change as soon as the shelter-in-place restrictions are relaxed and thus letting the “big freeze” start to thaw. However, this thawing will hurt and take a while to thaw after being frozen for so long. With so many industries closed for so long, the money will be tight, causing the companies to contract and cutting workers to stay afloat. However, this is an uncharted sea, no one has seen the United States economy freeze like this in modern times making a recovery by sometime in 2021 possible. For Trump, this still a problem as this is after an election year. Whoever holds office next will likely receive the credit for the recovery whether the credit is due or not. All told, Trump’s final year of his first term will likely mirror Herbert Hoover’s, the president that saw the start of the Great Depression. He was not reelected.

Between the wartime president effect wearing off, a falling stock market, and skyrocketing unemployment, Trump has lost his “trump card”, the economy. Without this card, he will only have his own personality to get him reelected and this will not be enough for such an unpopular president. The only factors that will change this outcome is the COVID-19 pandemic suddenly ending, the economy recovering sooner than anyone anticipates, and if the Democratic Party does not spit the votes between Biden and Sanders. Will this global pandemic be the thing to cause this Trump tower to finally come crashing down?

References

Dow Jones Industrial Average. (n.d.). Retrieved April 4, 2020, from https://www.marketwatch.com/investing/index/djia/charts

Election Other – President Trump Job Approval. (n.d.). Retrieved April 4, 2020, from https://www.realclearpolitics.com/epolls/other/president_trump_job_approval-6179.html#polls

Fritze, J. (2020, April 1). Trump warns of ‘very painful’ time as aides predict US coronavirus death toll could reach 240,000. Retrieved April 4, 2020, from https://www.usatoday.com/story/news/politics/2020/03/31/trump-coronavirus-pandemic-could-kill-many-240-000-americans/5100446002/

Haltiwanger, J. (2020, March 18). Trump, who spent weeks downplaying coronavirus, now declares himself a ‘wartime president’ as the US gears up to fight it. Retrieved April 4, 2020, from https://www.businessinsider.com/coronavirus-trump-declares-himself-a-wartime-president-2020-3

Labor Force Statistics from the Current Population Survey. (n.d.). Retrieved April 4, 2020, from https://data.bls.gov/pdq/SurveyOutputServlet

Wolfers, J. (2020, April 3). The Unemployment Rate Is Probably Around 13 Percent. Retrieved April 4, 2020, from https://www.nytimes.com/2020/04/03/upshot/coronavirus-jobless-rate-great-depression.html